In Focus

Council Asks PCAOB to Broaden Definition of Critical Audit Matters

CII sent a letter to the Public Company Accounting Oversight Board (PCAOB) July 27 commenting on the board’s proposed auditing standard entitled “The Auditor’s Report on an Audit of Financial Statements When the Auditor Expresses an Unqualified Opinion and Related Amendments to PCAOB Standards.” This PCAOB release is actually a reproposal aimed at gathering comments on changes that the board adopted to the standards following a 2013 proposal.

In its correspondence, the council expressed the following views on the changes to the standards:
  • The definition of “critical audit matters” required to be discussed by the independent auditor in the auditor’s report should be broadened beyond any matter that “relates to accounts or disclosures that material to the financial statements.”
  • An independence statement and information about auditor tenure should be included in the auditor’s report.
  • The addressees of the auditor report should be limited to the shareowners of corporations or equivalents for companies not organized as corporations. 

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